Hepatocytes prepared from streptozotocin- and alloxan-diabetic rats starved for 24 h contain 0.5--2% wet wt. of glycogen. Glycogen synthesis in the hepatocytes from such rats, after prior depletion of the glycogen by glucagon injection, was studied. As distinct from cells from normal animals, there was no glycogen synthesis from glucose as sole substrate, even at concentrations of 60 mM. When supplied with glucose, a gluconeogenic precursor (lactate, dihydroxyacetone or fructose), and with glutamine there was concurrent synthesis of glucose and of glycogen. Without glutamine there was little or no glycogen synthesis. The rate of glycogen formation was in the same range as for cells from control rats. Glutamine addition markedly activated glycogen synthase in cells of starved diabetic rats, but there was no effect on phosphorylase. We obtained very little synthesis of glycogen with hepatocytes from fed diabetic rats, whereas with normal animals, synthesis by such cells equals or exceeds that obtained from starved rats. The conversion of synthase b (inactive) into the active form was studied in rat liver homogenates. The activation of the synthase in cells from starved diabetic rats is somewhat less than that from normal animals, but that from fed diabetic rats is markedly decreased compared with that in livers of fed control animals or that of starved diabetic animals.